The ancient Egyptian economy

The economy of pharaonic Egypt has been called an ancient command economy, but one
should always remember that such modern definitions are not as apt as one would hope for.[2]
Still, there was a specialized bureaucracy which monitored or controlled much of its activity, one
of the hallmarks of planned economies. On the other hand, in general the officialsas state
employees and not as private landowners or managers of state farmsprobably did not tell
farmers what to grow and these continued to do what their predecessors had done. But they
remeasured and reassigned the land after every inundation based on past assignments, assessed
the expected crops, collected part of the produce as taxes, stored and redistributed it to those on
the state's pay lists. Storage and redistribution were generally done on a local basis. Regional
facilities provided produce in case there was a shortfall in one of the local centres.
Bureaucrats were also in charge of public works which were mostly religious in character and
involved at times tens of thousands of workers and administrators.

Egypt was a patchwork of mostly autarkic households and domains. After the taxes were paid,

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domain administrators and successful householders stored surpluses for future use or exchanged
them by barter on the market, an institution the nature of which is remarkably badly understood.
The percentage of produce and even manufactured goods which reached markets was probably
small. It may have been of marginal importance to the survival of the individual producer, but
provided part of the economic base for the developing Egyptian high culture.
Much of the trade beyond local exchanges is thought to have been in the hands of wholesale
merchants acting for the crown or the great temple estates. The extent to which private
individuals were involved in trading cannot be estimated. Market forces seem to have played a
role above all during the periods when the administration broke down.
Major changes to the early barter system began to occur only with the influx of foreigners and
the introduction of coined money in the Late Period.
The population
The vast majority of the population, probably more than nine tenths during the first two
millennia of Egypt's history, lived on the land [1] in mostly self sufficient village communities
and, in early times at least, in a state close to serfdom. The land they worked belonged in theory
to the gods, Osiris and after his demise to Horus and his earthly incarnation, the pharaoh. In
practice a virtual ownership evolved, a development which culminated in the Late Period, when
land could be freely bought and sold.
Apart from the tenant peasants, a large section of the population worked as farm labourers on
the estates of noblemen and of the temples. During the New Kingdom perhaps a third of the land
was in the hands of the Amen priesthood, with a proportionally large number of workers and
slaves.
Administrators, priests, traders and craftsmen lived mostly in the cities along the Nile, which
could be supplied with victuals relatively easily and cheaply by boat.
Sources of wealth
Farming and fishing
Agriculture created most of Egypt's wealth. Grain,
vegetables, fruit, cattle, goats, pigs and fowl were
grown, and fish from the Nile were caught, and
eventual surpluses, after deduction of the various
taxes, were sold on the markets.
Thanks to the yearly inundations the soil remained
fertile. But agricultural techniques were not very
efficient. Improvements were rare, implements
remained primitive and the breeding of better livestock
was haphazard.
Pisciculture appears to have have existed on a very
small scale. But practically all the fish consumed were caught in the Nile. Hunting, a leisure
activity to the rich, and gathering played a small economic role over all, but may have been
crucial to the survival of the poorest.
Manufacture
A large part of the manufactured goods came from the families which produced the raw
materials. Labour was divided according to gender, with the processing generally left to the
women. While the men grew flax, their women spun it into thread and wove the linen. A sizable
proportion of the grain produced was used for beer production. The fish caught by the men had
to be cleaned and dried, which was generally done by women, to be of much use in the hot
climate of Egypt, unless they were consumed immediately.
In the towns small factories appeared, often financed by rich noblemen: bakeries, breweries,
carpentry workshops and the like with a few dozen employees. In these manufactories weaving,
for instance, became a largely male occupation with the introduction of upright looms during the
New Kingdom.

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Mining
Most of the things mined were of little interest to anyone but a small number of rich people.
Precious metals were not in general circulation until the Late Period and even then remained in
the hands of few. The metals used for tools - copper, bronze and, from the Late Period onwards,
iron - were expensive and the implements fashioned from them were beyond the reach of many.
Poorer people continued to use stone and wooden tools for most purposes well into the Bronze
and even beyond into the Iron Age. Gems too remained in the possession of a wealthy
minority and the stone quarried for temples and tombs served the same class of people and
profitted only the craftsmen involved in building.
Natron needed for the embalming process, was mined in the Wadi Natrun. Embalming was too
expensive for all but a few.
Commerce and banking
Egypt, Retenu and Nubia: Major trade routes
Source: ad
Most of the produce was consumed by the producers themselves.
What was left after landlords and tax-collectors had taken their share,
could be sold by barter on the free market either directly to consumers
or to professional traders. Little is known about these merchants. It is
generally assumed that they were, at least until the Late Period, for the
most part agents of the crown or the great estates.
Some of the wheat harvested and belonging to private owners was
stored in state warehouses. So was much of the grain collected as
taxes. Written withdrawal orders by owners of lots of grain were used
as a kind of currency. These grain banks continued to serve growers
and traders even after the introduction of coined money in the latter
half of the first millennium BCE. Under the Ptolemies a central bank
at Alexandria recorded all accounts of the granary banks dotting the
country. Payments were transferred from account to account similar to
the modern giro system. Credit entries were recorded with the owners
name being in the genitive or possessive case and debit entries in the
dative case.
Since the second half of the first millennium BCE gold, silver, and
copper in specie were used mostly in dealings with foreigners, be they
mercenaries or merchants.
High interest rates did not encourage commerce and during the first millennium BCE they
may well have put Egyptian merchants at a disadvantage vis--vis foreign traders who were
funded from abroad. During the Saite Period monthly interest rates could reach 10%.
Energy
The main energy source of ancient times was muscle power provided to a large extent by
humans, but domesticated animals played an important role. The animals used in agriculture
were donkeys for transporting produce and cattle for ploughing and other heavy work.
Harnessing was inefficient. The yoke resting on the animals' shoulders was unknown, and the
shafts of the ploughs were fastened to the horns of the cows.
Horses were introduced into Egypt during the Second Intermediary Period and never achieved
economic importance. Expensive to keep, they were only employed by the aristocracy and the
military for pulling chariots and later for riding. Vehicles
with light spoked wheels came into use during the New
Kingdom and served mostly for warfare and sport. Anything
transported by land, even in arid desert regions, was either
carried by humans or donkeys, or dragged on wooden
sledges.
Laden donkeys
Source: Lionel Casson, Ancient Egypt - Time-Life Books

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Wind energy was exploited only by ships and even there quite inefficiently: The square sails
used enabled only sailing before the wind. The Egyptians were fortunate in that the Nile flowed
from south to north. The prevailing winds were northerly and sufficed to blow the ships upriver.
They were let to drift downriver with furled sails. But often a destination could only be reached
through rowing which required large crews.
Fire was needed for cooking and baking food, smelting and casting metal, glassmaking,
burning pottery and very rarely for making bricks. For the working of metals high temperatures
had to be achieved and this was done quite possibly with charcoal. No coal was available in
ancient times and wood was not very plentiful. One suspects that ordinary fires were fed with
any dry vegetable or animal matter that was at hand.
The heat of the sun on the other hand was put to very good use in the production of mud
bricks, which were the perfect building material in a practically rainless country like Egypt.
Warfare
Military ventures can be a source of income - as long as one is successful. Egypt was fortunate
in this respect until the Late Period, when it came under the domination of foreign powers. What
began with relatively benign occupations by the Libyans, Kushites, Assyrians and Persians,
would become oppressive under the Roman Empire, which exploited its provinces ruthlessly.
The attempts of Cleopatra VII to retain independence were unsuccessful and the country fell prey
to Octavian. For as long as Rome ruled the Mediterranean, Egypt was little more than its bread
basket.
Unlike the much vaunted empire of the New Kingdom in the Levant, which was mostly a
string of subject states in Lower Retenu run by local potentates, Nubia and Kush, the important
conquests in the south, were closely integrated into the Egyptian culture. Lower Nubia at least
was directly ruled and exploited by the Egyptians for most of the second millennium BCE. Its
importance as supplier of gold, slaves and luxury goods was underlined by the appointment of
vice-roys to rule Kush directly. No other region conquered by Egypt was economically and
culturally as dependent, nor retained this affinity for centuries after Egypt's power had declined
in the first millennium BCE.
Bravery in battle was rewarded with appointments,
decorations in the form of golden necklaces and bracelets,
and gifts of land and slaves, part of the booty plundered
from vanquished enemies. Tribute was imposed on
defeated nations and the 'exchange' of gifts between the
pharaohs and the kings of client states was generally in
Egypt's favour.
Tribute brought before Ramses II, excerpt
Source: British Museum website
Slavery
The practice of slavery was practically ubiquitous in
ancient times. In Egypt it was seemingly less harsh and
widespread than in other societies. Still, some branches of
the economy like mining [2] depended to some extent on
the labour and expendability of slaves, above all during the New Kingdom, when warfare and
trade greatly increased the number of enslaved foreigners.
Taxation
Cf. the main article on taxation: Dues and taxes
Ancient Egypt is considered by some to have been the most heavily taxed nation and to have
collapsed under the weight of the levies imposed on the populace. But, with a few minor
interruptions, its society existed peacefully and basically unchanged for more than two millennia.
Even in its days of decadence Herodotus thought it provided better living conditionsif health is
anything to go bythan most others he had seen,

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Scribes recording the amount of grain harvested

Source: Lionel Casson, Ancient Egypt - Time-Life Books
... they think that all the diseases which exist are
produced in men by the food on which they live: for the
Egyptians are from other causes also the most healthy of
all men next after the Libyans.
one of the other causes being the climate.
The state relied on revenues in the forms of labour and
taxes paid in kind. Grain was the most important produce
hoarded by the authorities, as it could be stored with
relative ease and was vital in years of bad harvests.
The beneficiaries of the system
The commonweal
A major part of the levies imposed on the people was used to stabilise society. A bureaucratic
administration, at first native and in the Late Period increasingly foreign, enforced order
throughout the country during most of its history. Three millennia of mainly quiet development
point to the success of this policy: Grain was stored which could be distributed in times of
famine. Corve workers were fed from these stores during the months of inundation when work
in the fields was impossible. Artisans constructing public buildings found employment, paid by
the royal treasury. Even the offerings at the temples were at least partially used to feed the poor.
Of course, different classes of people benefitted to different degrees, but care was taken not to
leave too many people with nothing to lose, a lesson the Spartans and the Romans for instance
never learned. While famines affected the poor much more than the rich, in normal times there
was not that much difference as regards health, survival of ones children or even longevity.
Peasant villagers, on the whole the poorest segment of the population, hardly ever travelled far
and their knowledge of what lay beyond their own community was limited. They came into
contact with low ranking scribes and overseers, who were not much better off than they
themselves. But by thrift and hard work they could hope to gain additional property and rise on
the social ladder.
The upper class
In a society where precious metals were not considered a special means of exchange and were
mostly in the hands of the pharaohs and the temples, wealth was synonymous with possession of
land.
Theoretically all the land belonged to the pharaoh who could dispose of it at will. Large tracts
were given to the military, above all during times of unrest when the kings needed their support
and were unable to recompense them in any other way. Officials were also beneficiaries of such
royal munificence. But most of the land came to be owned outright by the temples and the
peasantry.
A considerable amount of wealth was invested in the building of tombs and the services
following burial, which were supposed to go on for ever.
The temples
The gods had to be propitiated by offerings and rituals celebrated by great numbers of priests.
To maintain this clerical establishment large parts of Egypt were donated to the temples. By the
New Kingdom they appear to have owned as much as a third of the arable land and were exempt
from paying taxes. Even the people in their employment were protected by law against
impressment. This concentration of wealth may have contributed to the decline of the state under
the 20th dynasty.

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Footnotes:
[1] Estimates of ancient population figures are mostly more or less educated guesses. Bagnall
and Frier's estimate of the urban population in the first centuries CE amounts to 37%, making
Roman Egypt the most urbanized society of its day; others like Scheidel think it was less than a
quarter. [Back]
[2] Quarrying on the other hand was always done by Egyptian craftsmen supported by draftees to
perform the unskilled labour and soldiers for protection, generally in the form of
expeditions.[Back]
Bibliography for this and related pages:
Acta Universitatis Upsaliensis - Boreas Vol.6, 1974
S.Allam, Hieratische Ostraka und Papyri aus der Ramessidenzeit, Tbingen 1973
APIS Advanced Papyrological Information System
Bagnall, Roger S.; Frier, Bruce W. ; The Demography of Roman Egypt, Cambridge University
Press, 1994
S. Birch, Records of the Past, Series 1, Vol.VIII, 1876, Samuel Bagster and Sons, London
J. H. Breasted, Ancient Records of Egypt, 5 volumes
S. Carmona, M. Ezzamel; Accounting and Forms of Accountability in Ancient Civilizations:
Mesopotamia and Ancient Egypt, 2005
Lionel Casson, Ancient Egypt, Time-Life Books
Herodotus, Histories II - Euterpe
T.G.H.James, Pharaos Volk, Artemis Verlag Zrich und Mnchen , 1988
J. Kraus, Demographie des alten gypten, 2004
M. Lichtheim, Ancient Egyptian Literature, 3 volumes, 1973-1980
Peter van Minnen, Ancient Society 30, 2000
Juan Carlos Moreno Garca, 2008, "Estates (Old Kingdom)", in Elizabeth Frood and Willeke
Wendrich (eds.) UCLA Encyclopedia of Egyptology, Los Angeles,
http://repositories/cdlib.org/nelc/uee/1012
Brian P. Muhs, Tax Receipts, Taxpayers, and Taxes in Early Ptolemaic Thebes, Oriental Institute
Publications, University of Chicago, 2005
W.M.Flinders Petrie, Illahun, Kahun and Gurob, 1891
Jacob Rabinowitz, Isle of Fire, Invisible Books, 2004
Scheidel, Death on the Nile: disease and the demography of Roman Egypt, Brill 2001
Kurt Sethe, Urkunden der 18. Dynastie Band I, J. C. Hinrich, Leipzig, 1914
R.S. Simpson, Demotic Grammar in the Ptolemaic Sacerdotal Decrees (Oxford, Griffith Institute,
1996)
Herbert Thompson The Demotic Papyri, W.M.F. Petrie Gizeh and Rifeh
Sten V. Wangstedt, Ausgewhlte demotische Ostraka aus der Sammlung des Victoria-Museums
zu Uppsala und der Staatlichen Papyrussammlung zu Berlin, Uppsala 1954
The Thesaurus Linguae Aegyptiae website

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